Chile Oil and Gas Report Q1 2015
Given a lack of below-ground potential, Chile suffers from a severe deficit of hydrocarbon supplies and a high dependence on imported energy feedstock. However, the country’s leadership recognises the unlikelihood of a trend reversal, implementing a new national energy strategy to spur greater development of the sector where possible. The Bachelet administration has continued Chile’s traditions of a liberal economy, regulatory transparency, and encouragement of foreign investment. Chile’s most immediate opportunities lie in the expansion of their liquefied natural gas (LNG) import facilities as a means to meet growing domestic demand. On a longer-term basis, Chile is exploring the possibility of tapping is unconventional resources in the Magallanes region, offering a potential opportunity for sustained output growth.
The key trends and developments in the Chilean oil and gas sector are:
- Chile’s attractive fiscal regime, favourable regulatory environment, and stable macroeconomic growth have been unable to spur significant investment into the country’s oil and gas sector due to poor belowground rewards compared to its regional peers.
Chile has experienced varying degrees of output growth in the past several years, and while the country is making broad efforts to expand capacity, we forecast only slight growth over the next decade.
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